Key Points
- Bitcoin-backed stablecoin issuer, Hermetica, has secured $1.7 million in seed funding for USDh’s expansion.
- USDh, a stablecoin pegged to the U.S. dollar, aims to unlock $1 trillion in untapped Bitcoin value in DeFi.
Hermetica, the firm responsible for the Bitcoin-backed stablecoin USDh, has successfully garnered $1.7 million in seed funding. The funds are expected to fuel the growth of USDh.
USDh is a stablecoin that is backed by Bitcoin (BTC). Stablecoins are a class of cryptocurrencies that strive to keep their value consistent with a stable asset, such as the U.S. dollar, rather than experiencing volatility like Bitcoin.
Understanding USDh
The design of USDh allows Bitcoin holders to carry out transactions with a digital asset whose value is pegged to the U.S. dollar, all while staying within the Bitcoin ecosystem. For instance, 1 USDh is equivalent to 1 USD worth of Bitcoin.
As per a company press release, UTXO Management was the leader of the funding round. Other significant investors included CMS Holdings, Ethos Fund, and Trust Machines SPV. Additionally, strategic backers such as Tycho Onnasch of Zest Protocol and Robin Obermaier of Liquidium also participated.
USDh is issued on the primary blockchain of Bitcoin, Layer 1, and on Layer 2 networks. This issuance allows for quicker and more cost-effective transactions. The stablecoin can be purchased on decentralized exchanges.
USDh’s Potential in the Stablecoin Market
In the previous month, Hermetica introduced USDh on the Stacks Layer 2 network. This introduction gave users the opportunity to earn yields of up to 25%.
As the stablecoin market continues to expand, USDh is targeting a portion of the estimated $1 trillion in untapped Bitcoin value that could potentially be unlocked in DeFi. The primary aim of USDh is to allow Bitcoin market participants to securely hold dollars without having to leave the Bitcoin ecosystem or convert to fiat currency.